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Market Commentary 16/06/16

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EUR/USD – Significant Drop Lower

After making its way higher last night it was looking as though EUR/USD might be able to break the high of the previous move down and start advancing higher.

Early this morning we saw that this was not going to be the case as the price started a vertical drop lower which is still taking place now. What’s interesting about this move down is how the US traders and the EU traders both entered their sell trades at the same point. We can see there was a large bearish pin bar which formed towards the end of the US trading session last night, the sign of a bearish pin means somebody has sold. The price continued to rise even after the pin bar had formed, by the time the EU trading session had begun this morning the market had climbed up to the highs of the bearish pin created by the US traders selling and we saw the EU traders come into the market and place sell trades at the same point.

For now I think it’s best to wait for more structure to form before we start looking to get a long or short trade placed. The fact this move down has been so strong and no kind of retracement taken place means a large number of retail traders will be entering into short trades right now. If the banks want a continuation lower to take place they must cause the market to pause or retrace to make all of the traders selling close their trades as this would put buy orders into the market which the banks will use to get more sell trades placed.

USD/JPY – Broken Through The Retracement Low

The low of the retracement which the price has been coming dangerously close to breaking over the past few days has now been broken.

As expected some profit taking came into the market which caused the price to stop moving lower. The small retracement this has caused is also looking to now be over as we see some more selling enter the market. If this current bit of selling is able to push the price down below the low made by the profit taking it will confirm the supply zone marked in the image to be safe for trading and we can begin looking for opportunities to go short if the price manages to come back into the zone.

AUD/USD – Daily Demand Zone Broken

The daily demand zone which has caused a couple of up-moves to take place over the past few days has finally been broken and the price is now looking like it will drop down to the lows of the retracement which began 24th of May.

The drop means our focus is now on getting short into this new down-movement. The breakout zone is a place where we can look for a potential short entry if the price comes back to the zone which I think it will looking at the way the current price action is forming.

Tonight watch for a bearish engulfing candle to form inside the breakout zone.

Finding Supply & Demand Zones That Work!

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The Differences Between Zones Created By Bank Traders Taking Profits And Zones Created by The Bank Traders Placing Trades